A major change is likely to come for millions of salaried employees as the Employees’ Provident Fund Organisation (EPFO) is considering increasing the salary eligibility limit for PF and pension benefits. If approved, employees earning up to ₹25,000 per month will also be brought under the EPF and EPS-95 pension umbrella. This development could significantly expand social security benefits for the middle-income workforce.
Why the Salary Limit May Increase
Currently, the Employees’ Pension Scheme (EPS-95) applies only to employees whose basic salary is up to ₹15,000 per month. Many employees earning slightly above this limit miss out on long-term pension security. To strengthen retirement benefits and cover a wider segment of the workforce, the proposal to raise the salary cap to ₹25,000 is under active discussion.
What Will Change If the New Limit Is Approved
Increasing the salary limit to ₹25,000 will directly expand EPF and EPS coverage to lakhs of new employees. Under the updated structure, employer contributions towards pension will also increase. With higher eligible salary, the employer’s EPS contribution pool becomes bigger, creating improved monthly pension benefits in the long run.
Impact on Employee Savings and Pension
If the salary cap is revised, employees currently earning between ₹15,000 and ₹25,000 will start receiving mandatory PF and pension benefits. This means their retirement savings will grow faster with monthly contributions from both employee and employer. Over the years, this will result in higher accumulated PF balance and better pension payout after retirement.
Employer Contribution Will Rise
Under EPS-95, the employer contributes 8.33% of the basic salary into the pension fund (subject to the wage ceiling). With the ceiling moving to ₹25,000, the employer contribution will increase substantially. This will help build a stronger pension base for every eligible employee covered under the new rule.
Why This Move Matters
This proposed change is being seen as a major step towards strengthening India’s retirement security framework. Many employees in the lower-middle salary bracket are not covered under EPS due to the outdated wage cap. Raising the limit will bring them into the national social security network, offering long-term financial protection and stability.
Implementation Timeline and Current Status
It is important to note that EPFO has not yet officially notified the revised salary limit. Discussions are ongoing and formal approval from the central government will be required before implementation. Once notified, the new rules will apply to all establishments covered under EPF Act.
What Employees Should Do Now
Employees earning above ₹15,000 should monitor official announcements closely. You can also consult your HR department to understand how the change may affect your salary structure, PF calculations and long-term pension benefits.
Conclusion: The proposal to increase the EPF and EPS salary limit to ₹25,000 marks a progressive step that can benefit millions of salaried individuals. If approved, it will strengthen pension coverage, boost provident fund savings and ensure wider financial protection for the workforce. The final notification is awaited, but the potential impact is already being seen as a major positive development.
Disclaimer: The information above is based on current discussions and media updates. Final rules will only apply after official government notification.
